People talk about the best investment that they can make it becomes more difficult to answer question like that because it's so broad in nature. Picking the best investments is one part information about the different investments available in two parts self-knowledge. Easy part is getting information on different investments the harder part is to learn about yourself and what you can live with when it comes to picking the best investment.

Learning about you, when it comes to investments, the point is to try to be objective rather than reactionary. Moshe reactions are usually generated by the volatility of an investment in the emotion of losing what you have are missing out on an opportunity. They're easy to say and simple to understand more difficult to execute. The bottom line is if the volatility of investment is going to keep you up at night it doesn't make sense to run the quality of your life over few dollars. This hub is about information side of different investments you can make in his more general to give you an overview of most of the choices available. It will cover the three basic types and classes of investments.

Stocks of a publicly traded company are basically ownership or a piece of the company. They're bought and sold through centralized market is regulated by the country's government. Generally speaking there are two types of stocks:

Common stocks -- these types of stocks are actively traded and usually produce two types of returns. Percent of return is capital appreciation which is simply speaking, one buys at a lower price in the future the stock price rises. The second type of return is a dividend. The dividend is a portion of the company's profit paid out to shareholders of the company. By owning a common stock doesn't guarantee the owner a dividend and if the dividend is paid out usually fluctuates from one paid out to the next.

Preferred stocks -- these types of stocks are traded but not as frequently as common stock. Preferred shares do participate in both capital appreciation as well as dividend payouts however the slightly different. Usually the capital appreciation isn't as robust as a common stock however the dividends that these shares receive are usually predetermined and regular. Preferred stock usually isn't as volatile in the share price as common stock, but it isn't guaranteed.

Bonds are created through the borrowing of the bondholder’s capital or cash in return for a usually predetermined interest-rate. Interest-rate payable by the Borrower is influenced by interest rates in the risk associated with the potential loss of the capital borrowed. Basically there are two types of borrowers to create bonds:

Government bonds -- are usually considered to be the most stable bonds market. However there three different government bodies that creates bonds and they are; municipalities, state or province governments, and federal governments. Whichever type of government that is backing the bond is the one that's borrowing the money from the investor and is guaranteeing return of the capital. One important note is that in this case the guarantee is the subject of term and it is possible for any organization that backs the bond to defaults and not return to regional capital, however unlikely.

Corporate bonds are similar to government bonds in the major difference is a company is backing up the bond rather than the government. Corporate bonds are generally issued by very large and usually very stable companies as part of their corporate finance plans. The bond market has a rating system to give the investor an idea of how risky or secure different bonds are.

The following are a few variations on the types of bonds on the market:

Convertible bonds are bonds that have an option to be changed or converted into stock in the future.

Callable bonds are variation that gives the company the option of redeeming or paying an investor their capital back earlier than the of the bond itself.

Zero-coupon bonds are unique type of bond in that they don't pay interest to the lender or bondholder, rather there are issued at a discount of their par value. This simply means $1000 bond, which we usually mean the investor would lend $1000 that would be returned in a specific date for interest payments, would be sold for $600 today and be worth $1000 at maturity (example and 10 years time).

The benefits of bonds are that they usually pay a higher interest-rate due to their longer maturity than other types of interest-bearing investments. They also have an actively traded market for investors wishing to sell their bonds before maturity at a premium or discount.

Government T-bills (U.S. Treasury bills) are similar to bonds in a few important differences. This type of security has a much shorter maturity date then bonds and is considered more liquid or easier to sell than bonds. They are sold at a discount from their face value, similar to the zero-coupon bonds. The investor buys T-bill at the discount price and once it reaches maturity is paid the full face value. In the case of the U.S. Treasury bills are sold out three maturity periods, three months, six months and one year (which is calculated in weeks). Due to the shorter maturity and a reduced risk of default a significantly lower return than other fixed income options with longer maturities. by many this would be considered the best investment for someone with a very short investment horizon. T-bills do offer a lower potential for volatility, more specifically a loss an opportunity due to prime rate movement.

Depending on your investments timeline and your emotional temperament to volatility these are at the very basic level, the three types of investments available. It is now your personal preference that will determine the best investment for you. As always, seek professional advice before making any decisions about investing. There are other investments that are based on these three types that provide different features and benefits and should be more easily understood this foundation. There are mutual funds, EFTs, options, futures and others to name a few and they'll be covering those in future hubs.